Falling OSB prices impact LP's Q4 performance

Louisiana-Pacific Corporation (LP), the parent company of LP Building Solutions, reported fourth quarter 2022 net sales from continuing operations decreased by 16% to $705 million.

During the quarter, LP Siding Solutions sales increased 38% to $385 million—a company fourth quarter record. 

But sales of oriented strand board (OSB) plunged by 45% to $257 million during the period.  The sales figure includes OSB being sold at 34% below the price for the fourth quarter last year.

For the full fiscal year 2022, LP reported net sales from continuing operations decreased by 2% to $3.9 billion while Siding Solution sales moved ahead 26% to $1.5 billion. OSB sales decreased 14% to $2.1 billion for the year.

Income attributed to LP from continuing operations for the fourth quarter 2022 decreased year-over-year by $180 million to a loss of $10 million. On a year-over-year basis, income attributed to LP from continuing operations decreased by $418 million to $888 million.

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The Bottom Line: Falling OSB prices hammer LP sales and profits in Q4 and 2022.

What the CEO said: "Inflationary pressures continue to present headwinds, housing starts have softened, and OSB prices remain depressed after falling steeply in the fourth quarter,” said Brad Southern, LP CEO and chairman. “However, LP has managed through challenges like these before. I am bullish about the long-term fundamentals for housing, and very confident that LP's strategy of growth specialization will continue to deliver value in 2023.”

Company info: Click here to read the full fourth quarter 2022 financial report from LP.